How to Navigate Health Insurance as a Small-Business Owner (OPINION)

There are over 7.4 million employers in the U.S., and over 80 percent have fewer than 200 employees. And even though they are a large portion of the market, these small businesses can still have difficulty competing with larger companies.

Small businesses use benefits to help attract and retain the best employees. One of the top benefits commonly included is health insurance. However, there are over 2.7 million employers that do not offer group health insurance. Statistically, the smaller your business, the less likely you are to offer health insurance.

The landscape of health insurance in small businesses is rapidly changing. Under the Affordable Care Act (ACA,) small businesses with fewer than 50 employees are not mandated to offer traditional health insurance coverage — but there is still great value in doing so.

There are many things to consider with the new health care laws — health care exchanges, private insurance and health insurance tax credits. These can affect small businesses. Each business has to evaluate its unique situation when it comes to health insurance. Here are a few things to consider:

The current and previous health status of your employees. If your employees are generally in good health, a plan with less coverage may be a great option that enables you to offer health insurance at a lower cost. The ACA plans, often referred to as metallic plans, are categorized by Bronze, Silver, Gold and Platinum, with Bronze being the lower-level coverage and Platinum being the highest.

The benefits you offer to employees. You can choose to offer a core plan to all employees and dependents and then give employees the option to buy up to a richer benefit plan.

The amount you can contribute toward the monthly premium. You can choose to pay 100 percent of the premium or contribute a specific amount toward your employees’ premium. You will also need to consider how much your employees can afford to pay on the monthly premium.

The deductible amount. You will want to consider how much you are willing to spend on a deductible. Plans with higher deductibles have lower monthly premiums than plans with lower deductibles.

The provider network you want to use. If you have specific doctors you want to access under your plan, you will want to research the provider networks to ensure your doctors are covered.

Where your employees live and travel. Depending on where the majority of your employees live, you may be able to offer employees lower premiums or lower deductibles at a lower cost by choosing a narrow network plan.

Choices you can make to lower your premium. Consider options available to help lower your premium such as:

Plan design — There are a variety of types of plans to choose from including self-funding, PPO plans, POS plans, HMO plans, etc. HMO plans with no out-of-network coverage are less expensive than plan options with out-of-network coverage.

Network choices — Narrow network products are less expensive than full network products.

Lifestyle changes — Encourage employees through wellness programs to make changes such as quitting smoking or losing weight to lower plan costs.

Additional insurance options: You may want to consider offering additional insurance options to your employees such as vision benefits, dental benefits, life insurance, etc. These can be inexpensive ways to increase your coverage and add value to your total compensation program.

If you choose not to offer group health insurance, your employees will still need to get coverage. Individuals can get coverage through a private insurance company, a private heath exchange or through the Marketplace Exchange. Depending on where they fall in relation to the federal poverty level, they may qualify for a premium subsidy. 

Michael E. Stock is the president and CEO of Arkansas-based health insurance company QualChoice. He can be reached at [email protected].